Refer to the information provided in Figure 14.1 below to answer the questions that follow. Figure 14.1
-Refer to Figure 14.1. If the economy is actually at Point C but policy makers think that it is still at Point B, this is an example of
A) economic policies ineffectiveness.
B) recognition lag.
C) implementation lag.
D) response lag.

Question

Refer to the information provided in Figure 14.1 below to answer the questions that follow.  Figure 14.1
-Refer to Figure 14.1. If the economy is actually at Point C but policy makers think that it is still at Point B, this is an example of
A) economic policies ineffectiveness. 
B) recognition lag. 
C) implementation lag. 
D) response lag.

Quizplus · Accepted Answer

This is an example of recognition lag, which is the time it takes for policy makers to recognize and respond to changes in the economy. In this case, policy makers are operating under the assumption that the economy is at Point B, but it has actually moved to Point C. This delay in recognizing the current state of the economy can lead to ineffective policies and responses.

Refer to the Information Provided in Figure 14